Board members overseeing Honolulu rail fretted Thursday at the latest uncertainties hanging over the state’s largest-ever public works project.
Two weeks after the city missed its latest deadline, there’s still no award of the long-anticipated public-private partnership. Rail’s executive leadership has pursued that deal for the past two years, touting it as an optimal way to complete the project with less risk of added cost to taxpayers.
The so-called “P3” deal was originally slated to be awarded last September.
“I think we need to plan for the possibility that this P3 … is not going to succeed,” he said.
Meanwhile, the elevated project, currently estimated to cost some $9.1 billion, continues to face what HART finance officials estimate will be a $450 million total shortfall in state general excise and hotel tax revenues due to the COVID-19 pandemic.
“How are we going to get out of this hole?” Lee asked.
He said he’s not optimistic the Legislature would bail out rail a third time. He wondered whether rail leaders are simply “punting” the problem to whomever succeeds Kirk Caldwell as mayor.
“As far as I know there haven’t been any serious conversations” about how to cover the shortfall, HART Board Chairman Toby Martyn added.
Martyn said the only option other than the Legislature would be “for the city to make up the difference.”
Wes Frysztacki, who sits on the HART board as the city’s transportation director, speculated that the federal government might pass a large-scale relief bill, similar to the CARES Act, that would include funding for major capital projects hit by the pandemic, including rail.
In any case, next year’s new lineup of city leaders should be briefed on rail’s issues once the election determines who they’ll be, Lee said.
P3 Progress A Mystery
The P3 deal would have a private firm build the elevated transit line’s final 4.1 miles and eight stations to Ala Moana Center plus a transit hub and 1,600-space parking garage at Pearl Highlands — work that’s been valued at $1.4 billion.
It’s a joint procurement with the city because the deal would also have the firm oversee the elevated rail line’s first 30 years of operations.
The rail board does not oversee the joint procurement, but it did meet in executive session Aug. 27 to discuss the process.
HART leaders have stayed mum on how that process has gone. An agency panel assigned to evaluate the proposals from private entities submitted its report last month to HART Executive Director Andy Robbins, who serves as the chief procurement officer.
On Thursday, Robbins said HART is taking steps to keep construction on rail moving “whether it’s a P3, (or) whether it’s a re-procurement.”
Scrapping the P3 effort and starting over to procure what’s known as a standard “design-build” contract would take at least eight months, Robbins said.
Earlier in the meeting, Lee asked HART Chief Financial Officer Ruth Lohr to present them with budget numbers that assume the extra costs and delays associated with a “plan B” alternative to the P3 award.
“For a variety of reasons I think we should be planning and adjusting our cash flows on ‘plan B’ where we’ve got to re-procure,” Lee said.
It’s not clear how that re-procurement would impact rail’s overall completion date, which last month was pushed to April 2026.
It also remains to be seen how the city’s partners at the Federal Transit Administration would react, as they’ve only agreed to start releasing the remaining $744 million in federal New Starts funds once they see a P3 award that falls within the project’s budget.
Executive Director’s Contract Under Review
Meanwhile, the HART board’s Human Resources Committee has met three times in the past two weeks behind closed doors to review Robbins’ contract.
The most recent session, on Tuesday, lasted more than an hour. Members opted to continue their discussion next Tuesday.
HART board leaders weren’t available this week to respond to questions seeking more details on why they’re reviewing Robbins’ contract.
However, it appears the board never officially completed its annual review of Robbins’ job performance for 2019. Progress on a P3 deal was to weigh heavily into that evaluation.
In February, the HR committee briefed the full board on its evaluation behind closed doors. The full board agreed with those conclusions, according to Hoyt Zia, who was then serving as the HR committee chair.
The committee was then supposed to go over its review with Robbins and draft a final report. That review with Robbins did eventually take place, but the board never finalized its report, according to HART spokesman Bill Brennan.